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2015: What's Next? ISSUE 357 | 07 JANUARY 2015 Contents thereport 05 Beyond music: The Interview 06 Pinboard: Stats, deals, startups and more 2015: what’s next? 08 Country profile: Ireland The trends that will define digital music over the next 12 months 2 ISSUE 357 07.01.15 COVER FEATURE BEATS FINALLY MAKES GLOBAL WAVES Apple’s proper move into streaming music didn’t come with the launch of iTunes Radio – or even with its $3bn acquisition of Beats. It’s the upcoming relaunch of Beats Music that will really show us Apple’s ambitions to dominate the transition from downloads to streams. Veteran Apple watchers will have been smiling at the strategic leaks in recent months of the company’s plans – from its desire to lower the price of a monthly streaming subscription to as little as $5 to its negotiations with artists for exclusive deals on big albums. Apple has the clout to trigger a streaming- music price war as well as a wallet-laden battle for exclusives – it comfortably has the biggest wallet, obviously – as well as the What’s next? device footprint to push a free trial of Beats to hundreds of millions of phones, tablets and Happy New Year and all that, but will 2015 be joyful for the music computers worldwide. Beats Music reportedly The trends industry? It’s shaping up as a crucial period for many reasons ended 2014 with 300k subscribers; place your bets now on what multiple of that it’ll have by that will – from identifying the long-term winners in the streaming market the end of 2015. to understanding which non-music companies will be genuinely define digital significant to the industry’s growth. Many of our predictions are MANAGERS ON THE MARCH necessarily, well, predictable: Apple relaunching Beats; managers music over Yes, there’ll be plenty of debate about what asserting themselves over royalties; Facebook giving YouTube some streaming’s growth and downloads’ decline the next proper competition in online video. But these trends and more are means for overall industry revenues in 2015. report key to understanding why 2015 might be the most interesting year in But the debate that will come increasingly 12 months digital music since 2003 and the launch of the iTunes Store to the fore – even more so than in 2014 – is the argument about how those revenues are the 3 ISSUE 357 07.01.15 COVER FEATURE SoundCloud looks much more swoopable than Spotify, especially if it manages to strike more deals to remove the threat of rightsholder lawsuits” being divided. Managers will be crucial to the an IPO is not Spotify’s priority, it will surely SURVIVAL STRATEGIES Tidal make breakthroughs? Will genre- debate. come in 2015 unless someone swoops FOR PUREPLAYS focused streaming services – country or Those who spoke out last year about in with an offer the company truly can’t Whether funded by device sales, advertising metal, anyone? – find their niches? Can the need for transparency – Brian Message refuse. or venture capital, the big guns of the MixRadio take the Pandora model global in the UK, for example – have already A hugely enriching moment for streaming music world this year will hog as part of Japanese social giant Line? All signified their intentions to not just shareholders – labels included – but also most of the headlines. Amid the heat of the questions that will make 2015 extremely continue agitating publicly in 2015, but to potentially a hugely divisive moment amid Apple versus Google/YouTube versus Spotify interesting, although there are sure to be organise their peers and take that stance the artist royalties debate. battle, what chance for smaller pureplay high-profile casualties along the way. to the negotiating table with rightsholders SoundCloud? While an IPO isn’t out of the digital music services? Actually, there’s plenty and digital services. question, it looks much more swoopable than of room for optimism: the 900lb gorillas will THE RACE TO TRULY Watch closely, too, for the impact in the Spotify, especially if it manages to strike more require nimbleness from their underdog rivals. UNDERSTAND MUSIC FANS US of Maverick, the company launched last deals (it currently only has Warner Music in Can Deezer crack the US through October as a supergroup of management the bag) to remove the threat of rightsholder hardware partnerships? Will high-definition Like the Beats relaunch, this is a trend firms led by Madonna and U2’s manager lawsuits. Take your pick for suitors from the services like Pono Music, Deezer Elite and presaged by a high-profile acquisition in Guy Oseary (in partnership with Live usual big-tech firms. 2014 – in this case, Spotify Nation), who is determined to take a lead in And Shazam? It should still be an buying The Echo Nest. Digital striking digital deals for its clients. acquisition target, sitting between television, music folk (us included) have advertising and music. But who will buy? And been pontificating about “music SALE OR IPO FOR SPOTIFY, if the answer is “nobody”, does the company discovery” for years now, but SOUNDCLOUD AND SHAZAM have the business to go for an IPO? 2015 is the year it will finally – really – mean something. Post-Beats, what will be the next big exit Yes, there may be a for the digital music market? We suspect streaming price war. And yes, there’ll be two in 2015, and perhaps even distribution and marketing three: Spotify, SoundCloud and Shazam. In will be a huge factor in driving the first two cases, how those exits pan out takeup (in trials at least) of will tell us a great deal about the balance various services. But don’t report between short-term profit and long-term underestimate something strategy in this space. bubbling away once people For all of Daniel Ek’s protestations that start using these services: their the 4 ISSUE 357 07.01.15 COVER FEATURE Snapchat’s plans to add videos, mu- sic and news have already leaked out; plus it is starting the year with a $485m of new funding” simply an ad-supported one. terms, smartwatches will remain a novelty MESSAGING APPS AS Meanwhile, watch closely to see if rather than a game-changer: just a fun new Irving Azoff follows through on his threats way to control playback on a smartphone. ‘the new social media’ to sue YouTube over songwriting royalties. More impact will come from other kinds We won’t claim the credit for that line: VC But just as interesting a trend for 2015 of connected devices: cars – more fruits exec Fred Wilson bagged it in his end-of-2014 ability to truly understand their listeners. is the fact that YouTube is finally going to from partnerships between automotive blog post. “Messaging is the new social There are two separate strands to this. get some serious competition in the online firms and streaming services – as well as media,” he wrote. “Families use WhatsApp First, how do the likes of Spotify use their video market. At scale, that will come from from connected hi-fis and other audio- groups instead of Facebook. Kids use mammoth data archives to retain their Facebook, which is already driving huge streaming devices designed for the living Snapchat instead of Instagram.” The growth long-term users in the face of growing numbers of video views on its platform – room. of messaging apps was an important and competition? If someone’s been listening to 1bn daily views by the end of 2014. Right We also expect big things from some hardly-unremarked-upon trend in 2014, and Spotify for two, three or more years, what at the end of 2014 came an individual new players in the familiar device it’s why music:)ally wrote so regularly features will keep them listening and how illustration: Apple’s holiday video ad was category of smartphones. Well, about these and other companies will their data drive that? The Echo Nest is watched 3m times on YouTube and 20m new to the West, anyway: in the space. about as good a team of people as we can times on Facebook. Chinese smartphone makers In 2015, their ambitions think of to answer that question. For 2015, that spells more music like Xiaomi and Huawei will to become media portals But the other strand is how digital services marketers uploading videos directly to be on a global expansion rather than just messaging hit the ground running with new users: Facebook and likely some more rumours drive – the former company conduits will be a big deal. grasping their tastes as quickly as possible about a fully-fledged Facebook music recently raised $1.1bn for Snapchat’s plans to add and using that to drive retention too. videos feature. But watch too for smaller exactly that – with content videos, music and news have players like Vessel, which is trying to create (music included) part of their already leaked out; plus it is OFF-YOUTUBE PLAYERS MAKE a new off-YouTube (and off-Vevo) premium picture. starting the year with a $485m VIDEO MOVES window for music videos. The failure of Samsung’s Music injection of new funding, some Hub remains a cautionary tale for of which will be used to further YouTube ended 2014 as (once NEW DEVICES any device maker who thinks those plans. Line is buying again) the world’s biggest MAKING AN IMPACT selling lots of handsets is a MixRadio and launching digital music service. That guaranteed base for digital a separate music service won’t change in 2015, although Numerous tech blogs are music success. Still, the in Japan, while the likes we’ll also see whether the hailing 2015 as the year of Chinese firms’ expansion of WeChat, Tango and report initial trial of YouTube Music wearable devices, not least – into India as well – will be KakaoTalk (left) mull their Key turns into a sustainable because of the debut of the an important trend to watch media options.
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